In India, Hero Honda believes high fuel prices may be a blessing

In India, two-wheeled scooters and motorcycles are a very popular way to get around. Cars are out of the price range for many buyers, and until the Tata Nano comes out, will remain that way. Other factors are putting a crimp on the spending of many Indian households, including a huge inflation increase and the surging price of fuel. All of these things are likely to have a negative impact on the automotive sector. Some, though, believe that the two-wheeled market is set to pick up some of the slack. In fact, Hero Honda, the largest manufacturer of motorcycles in India, believes that there is a chance it could gain market share in these turbulent times. Some families that would otherwise purchase a second car may choose a smaller motorcycle or scooter instead in an effort to spend less money on the initial vehicle purchase and when keeping it filled with fuel. Similarly, scooter sales have risen dramatically in the United States as buyers find it more difficult to find sufficient credit to purchase an expensive new car and gas prices remain over $3.00 a gallon.

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